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Instagram and Extortion: Is There Any Hope for Celebrities Against Paparazzi?

By Anwar Abdur-Rahman

What does Gigi Hadid, Odell Beckham Jr., Kim Kardashian, Ariana Grande, and Nicki Minaj all have in common? They (among many others) all have been at the receiving end of copyright infringement lawsuits stemming from photos they’ve posted on their personal Instagram accounts.

Photographers and entertainment-news companies are filing lawsuits against celebrities for posting photos of themselves on their personal Instagram accounts. Many of these photos are taken by paparazzi, or freelance photographers who particularly seek to get candid photographs of celebrities with the intention of licensing their copyright ownership in the photograph to entertainment news outlets. As a result, the photographs taken are almost always unsolicited. Once the photo is licensed to a media outlet, it’s becomes published, thus capturing the attention of the celebrity who is also the subject in the photograph. The celebrity then re-posts the photo to their own personal Instagram, subjecting themselves to a copyright infringement lawsuit by the copyright owner of the photograph.

United States Copyright laws protect “original works of authorship”, including photographs. The owner of the copyright has the exclusive right to reproduce, distribute, perform, display, license, and prepare derivative works based on the copyrighted work for their life and for 70 years after his/her death. In the case of photographs, the photographer owns the copyright (unless it is assigned to another party, such as an entertainment news company). In determining copyright ownership of a photo, copyright laws do not factor the subject or content of the photo. When a copyright owner’s exclusive rights are infringed upon, they are given the option to recover $30,000 per infringement. If the court believes that the infringer did so willfully or with indifference or disregard to the copyright owner’s rights, the copyright owner is permitted to recover $150,000 per infringement. This means that by reposting one picture found online, a celebrity could easily be subjecting themselves to $150,000 if they did not first receive permission from the copyright holder.

The expansive rights and damages granted under copyright law seem appropriate when placed in the context of creative photographs of scenery, unique architecture, or historical monuments. However, when placed in the time universally known as “Age of Social Media” and context of unsolicited photographs of people, copyright’s expansive exclusive rights with photographs raise public policy concerns.

These particular copyright infringement lawsuits have created a morally questionable ecosystem in the entertainment industry: boutique law firms have spawned and become known solely for bringing these lawsuits against celebrities; many of these infringement lawsuits are brought by a few of the same copyright owners, and some celebrities have been targeted multiple times. Considering the way copyright protection is granted, celebrities are faced with two options when met with ones of these particular lawsuits. On one hand, the celebrity could “fight” back and attempt to defend their usage of the photo, which some have done by claiming that their otherwise-infringing usage fits within the statutory defense of fair use. This option extends litigation with the copyright owner, costing the celebrity additional attorney’s fees. On the other hand, the celebrity could prevent further litigation pay a settlement to the copyright owner for an amount less than what is statutorily required for them to pay (up to $150,000 per infringement if willful). While this option typically costs the celebrity less time and money in attorney’s fees, it often comes with a feeling of being extorted by the copyright owner. The majority of celebrities have opted for the latter, settling with copyright owner shortly after being met with the lawsuit.

In an effort to fight back, some celebrities have launched their own lawsuits against paparazzi and other copyright owners, claiming violation of their right of publicity. Right of publicity is a state-specific law giving celebrities grounds to take action when their name and/or likeness is used for commercial purposes without the celebrity’s consent. By licensing the photos taken of celebrities, paparazzi would be using the celebrity’s likeness for “commercial purposes” without the celebrity’s permission. However, this attempt to fight back will likely not go very far, as most states’ right of publicity statutes explicitly state that consent is not required when used in connection with “news, public affairs, or sports broadcast.” It will be extremely difficult for a celebrity to argue that an unsolicited photo of them by a paparazzi is not “news”, considering the popularity of reality television and publications dedicated to leaking celebrity’s private information.

Today, Instagram is ubiquitous. Virtually every celebrity has one to communicate directly with their fans and to give their fans a front-row seat into their lives and personalities. Copyright law has to address this mounting issue of celebrities being hamstrung into paying tens of thousands of dollars for simply reposting a picture found on the web to their Instagram. However, copyright owner’s rights must also be carefully protected in addressing this issue as well. Many of the copyright owners in question are freelance photographers whose income is primarily licensing fees from the photos they take of celebrities. If their rights are not carefully weighed in addressing this problem, many individual’s livelihood will be stripped away, along with their intellectual property rights.

One way to address the problem is for copyright law to adopt a much broader and more advanced understanding of the implied license doctrine. The implied license doctrine is widely used in contract law, and refers to the absence of an actual, expressed license. The implied license doctrine refers to a principle whereby a person’s specific conduct may be taken as a grant of permission to do something. In the past, the implied license doctrine has been applied to patent and copyright contexts in order to introduce a degree of logic into the law.

In the instant case, a broader reading of the doctrine could understand an implied license to non-commercially display the photograph from the photographer to the celebrity subject of the photo. Additionally, granting an implied license to display non-commercially balances the interests of both the paparazzi and the celebrity. Celebrities generally get access to the photo after it has already been licensed to an entertainment news company. Once the celebrity gets the picture, the copyright owner has already appreciated the commercial benefit of licensing the picture of the celebrity. It also provides a narrow scope of use for the celebrity that wants to use the candid picture of themselves to post on their Instagram without any plans to profit off of the posting. The implied license granted does not allow the celebrity to assign his/her right, and determination of whether the celebrity is the “subject” of the photo will be a fact-sensitive analysis based on several factors, such as the percentage of the photo the celebrity makes up.

If I Had a Dime for Every Time a Digital Platform Collected my DataJustifying a Digital Dividend.

I applaud this Legislature for passing the first-in-the-nation digital privacy law. . . . California’s consumers should also be able to share in the wealth that is created from their data. And so, I’ve asked my team to develop a proposal for a new Data Dividend for Californians.

Digital Dividends. In his 2019 State of the State speech, California Governor Gavin Newsom announced that his state will implement a “data dividend.” Digital, or data, dividends are payments made by online platforms to their consumers in exchange for the right to collect consumer data. “Platform” as used in this piece refers to the companies with the business model of collecting data on consumers and selling it to advertisers for profit. (There are other digital platform models such as the freemium and pay-for-access.) Right now, platforms have the power to unilaterally decide the value of consumer data. Generally, they provide consumers free access to their platforms in exchange for unlimited access to consumer data, valuing data at exactly the cost of admission (“data-for-access”). However, California is taking the position that consumers deserve to be compensated beyond this exchange.

One proposed digital dividend implementation is granting consumers a property interest in their data and allowing them to trade that interest for compensation. For example, if a consumer performs a Google search, posts to Instagram, and likes a tweet, that consumer could agree to allow Google, Instagram, and Twitter to use the data generated from those interactions for a nominal fee. Over time, the small fees would build up into a substantial sum: the digital dividend.

Does Gavin Newsom’s assertion of desert, which finds a home in Locke Labor Theory, supply an ideal justification for a digital dividend? This post asserts that it does not and argues Utilitarian Theory provides a better justification. Justification is important because it drives rhetoric surrounding new policies. Rhetoric will then shape the implementation of the digital dividend and serve as the basis for evaluating the digital dividend’s success.

A lucrative business model that caused political unrest. The two-sided market business model was at the center of the public outcry for a digital dividend. In this model, platforms cater to two markets, consumers and advertisers.They offer consumers free platform services in exchange for unlimited access to consumer data. For example, Facebook, Google, Twitter, and Instagram allow users to open accounts and use their platforms free of charge. These platforms profit by selling targeted advertisements to advertisers.Targeted advertisements use predictive algorithms to match products to consumers, showing individual consumers advertisements of products they will most likely buy. They are valuable and efficient because they reach consumers with personally-matched content and do not waste resources on consumers who would not care for the product.

The two-sided market has also expanded access to information. For example, Google grants consumers access to 2.5 quintillion bytes of information organized at the command of our fingertips. Facebook allows consumers to easily maintain connections with people around the world. Twitter allows news stories to come to light without having to go through the major news networks’ gate-keeping processes. However, “[t]he value of the data being exchanged may exceed the value of the product provided.” Without consumer influence in the marketplace, platforms have total control over the price of data.

As information on how platforms monetized consumer data through the two-sided market spread throughout the public, outrage flared. Consumers of free online platforms began to feel more like products and less like customers. They started to notice that when platforms and advertisers buy and sell data, the consumer is effectively sidelined in the transaction. This sentiment led to Gavin Newsom’s digital dividend proposal and other calls for compensating consumers. For example, plaintiffs in a class action lawsuit against General Motors (“GM”) argued that drivers of GM vehicles should be compensated for the data GM collects on them.

How do we justify changing the status quo? A digital dividend would signify a vast change from the data-for-access business model. Consumers would instead be compensated for their data through the trade of a property right. Gavin Newsom’s State of the State speech argues that users deserve to be compensated for their data. While that may be true, it is also more efficient to compensate users for their data. Efficiency is ultimately a stronger argument. Only efficiency, a priority of the Utilitarian Theory, envisions a property right strong enough to change from the status quo to a digital dividend.

Under a Locke Labor Theory desert argument, the consumer would only be entitled to the value their labor contributed to targeted advertisements. However, the platforms invest labor into the targeted advertisements as well. They collect and store the data, and engineer the predictive algorithms. Arguably, their labor comprises so much of the targeted advertisements’ value that a property right where the consumer could unilaterally block the platforms’ use of that data would not be equal to the value consumer labor creates. Without the right to block access, users would not be able to negotiate favorable terms. Meanwhile, the current data-for-access framework already compensates users by allowing them free access to the platforms.

Moreover, the Lock Labor Theory could not justify propertizing all data. There are three types of data that participate in the two-sided market: volunteered, observed, and inferred. Consumers deserve a property right in the volunteered data because that data is generated through their interaction with the platforms. Conversely, observed data and inferred data are generated by platform observation and algorithm engineering, respectively. Consumer labor is farther removed. Under Locke Labor Theory a meaningful property right can only be found in volunteered data.

Meanwhile, Utilitarian Theory would justify propertization of data that does more than just compensate users for what they deserve. Utilitarian Theory justifies propertization until the inefficiencies outweigh the benefits. It would support a property interest on the basis of important values like privacy and autonomy. These concepts are valuable for reasons other than the amount of labor the consumer invested into the monetization of their data. And notably, values like privacy and autonomy are not being realized in the current data-for-access business model. These market failures justify a shift from the current data-for-access model to a revolutionary new idea, the digital dividend.

Currently, users are passive players in the data market. Propertization will get consumers off of the bench, by showing them the true worth of their data and providing an incentive for them to be active in the market. Also, it can give consumers a bargaining chip that will allow them to negotiate better privacy terms for their data. To the offeror of the best privacy terms goes the spoils! However, the property right created in data must preserve the incentive to actually trade that data. Stagnation in trading will dampen the platforms’ ability to use efficient targeted advertisements. Therefore, any property right given must incentivize users to trade for the terms that most honor values like autonomy and privacy.

In order to create a meaningful property right in consumer data, advocates for a digital dividend should advance a Utilitarian argument. While users may deserve some property rights, a property right that allows consumers to block access to their data can be justified under an efficiency-based argument.

[1] This post was initially authored as a graded assignment for the Artificial Intelligence and the Law offered by Rutgers Law School in Camden. I’d like to offer special thanks to Dean Rick Swedloff and Professor Ellen Goodman, the class instructors.